Questions now from the party spokespeople. The Conservative spokesperson, Peter Fox.

Diolch, Llywydd, and good afternoon, Minister. Europe, and indeed the entire world, has been shaken to its core by events in Ukraine. A totally unnecessary and barbaric war, brought about by an individual blinded by his own perverse view of the world, will have far-reaching consequences beyond the borders of eastern Europe. I'm confident that every Member sitting in this Chamber would agree with that. We have a moral obligation here in Wales to do absolutely everything within our power to support our Ukrainian friends fleeing the war. That's why I welcome the fact that the defence Secretary, Ben Wallace, has stated that the UK Government can and will do more.

But the current crisis raises pivotal questions about the preparedness of our public services, which will be crucial in delivering the necessary help and support to our Ukrainian friends who will try to rebuild new lives here in Wales. This is where our local authorities, and the wider public and voluntary services, once again, will be on the front line. But for them to rise to the challenge, they must be given the tools for the job. Now, Minister, I know you stated yesterday you've held initial conversations with partners in local government about the issue. However, forward planning is going to be fundamental in preparing for whatever scenario may unfold, as I know a wide range of services will be required to support our Ukrainian friends. However, these services and, indeed, local authorities are already under huge pressure from the pandemic. Minister, what assessment have you made about the resources that councils will need to provide services to people arriving in Wales, such as accommodation, employment, education, housing, access to personal finance, and other vital resources? And, finally, what discussions have you had with colleagues from across Welsh Government about the lessons that can be learnt from the Afghan refugee settlement scheme, so that a new scheme can deliver the best help and support possible?

I thank Peter Fox for that question and very much associate myself with the remarks at the start of his contribution in relation to the horror of the unprovoked attack and our desire to do everything that we can to support people in Ukraine, using all the levers that we have at our disposal. I just want to reassure all colleagues that there is work going on all day, every day, in relation to this right across the Welsh Government and right across local government in respect of making preparations to welcome refugees from Ukraine to Wales. There is work going on particularly in respect of housing. Obviously, we need to ensure that we are able to have suitable places to receive people into Wales, and then to move on to communities where they will be hosted. And we're hoping that the UK Government will consider, in respect of its sponsorship scheme, to provide Welsh Government with that kind of co-ordination role because we've done it before. We've done it very successfully, I think, through the pandemic, where we've faced a similar challenge in terms of housing large numbers of people very quickly, and we've done that through our response to homelessness and rough-sleeping during the pandemic. So, we have experience recently that we can build on there. 

We have had some really productive and positive conversations at official level with the UK Government in respect of funding. What we would expect to see would be a per head funding scheme, as we've seen with previous resettlement schemes, rather than a Barnett consequential, which would not be the appropriate mechanism in this particular case. But we are having those discussions about healthcare needs, housing needs, integration, and supporting people into employment as well when they get here.

Thank you for that response, Minister; that's reassuring, and those of us on these benches will do all we can to help in that quest to bring those positive outcomes. 

Now, Minister, last week, it was reported by the BBC that around £200 million of Welsh local government pension schemes are currently tied up in Russian funds and companies. In more normal times, such investments would be usual practice, but, of course, we are certainly not in normal times. So, it's absolutely critical to ensure that Wales plays its part in punishing Russia for its illegal invasion by ensuring that not a single penny of Welsh public funds is inadvertently supporting the Russian regime in any way. As you will know, Minister, it will be up to councils to decide what action to take on this issue, but many councils will be left wondering what advice the Welsh Government will be providing about the future of local government pension funds, as well as minimising any financial impact on the pensions of people here in Wales. In saying this, I recognise that this issue is not unique to Welsh councils, or indeed to other public services. And so, I and, I'm sure, the wider public would be interested to know, Minister, what assessment you have made of the extent to which Welsh public funds are currently locked away in Russian assets. In the interests of Wales, we urgently need to be told whether the Welsh Government has any assets tied in Russia, which I sincerely hope you'll be able to speak of. Will the Welsh Government be reviewing its role in supporting responsible investment policies to help ensure that Welsh funds are used to support positive initiatives in Wales and further afield?

I'm grateful to you for raising that particular issue, and, over a period of time, I've had some very good discussions with the local government pension scheme representatives in respect of a range of issues—for example, divestment from fossil fuels, which again is a shared area of concern between Welsh Government and local government. But, specifically in relation to pensions, this is something that I wanted to investigate right from the start of the crisis, and we did have conversations with local government at the meeting that you've heard about, which took place close to the start of the crisis. At that point, local government provided reassurance that they'd done some early investigations and were looking at less than 1 per cent of their pension scheme being exposed to Russian interests, if you like. And, obviously, they are keen to do what they can to move that investment away and to repurpose it elsewhere. So, I did ask local government that question early on, but I wasn't happy to do it until I'd asked the same question of myself. So, we are awaiting some information from the Senedd's pension team as well to ensure that we have our own house in order, if you like, in respect of our pensions.

More widely in the public sector, it is only the local government pension scheme that is funded, so it uses contributions from members to invest in assets to provide future income for future pension costs. Most, if not all, of the other public bodies in Wales are part of unfunded schemes. So, the civil service pension scheme, NHS pension scheme, teachers' pension scheme and so on use current tax revenues and current members' contributions to fund those current pension costs, so they don't have investment in assets. And, again, more widely, thinking about assets, Welsh Government doesn't hold those kinds of assets overseas in the way that other Governments do, so we're clear of that kind of concern.

That's really helpful. Thank you for that, Minister. Minister, the international community has rightly come together to impose wide-ranging sanctions on Putin and his cronies. Of course, these are absolutely necessary, and these are likely to be increased. However, these sanctions will be felt right across the board—from hard-working families to small and large businesses and, indeed, our own public services. What assessment has the Welsh Government made with regard to the impact of the sanctions and the war on the Welsh economy and families right across Wales? For example, how is the Welsh Government going to address the impact of significant rises in fuel prices on public transport across Wales? And, finally, Minister, the war may impact on the cost and availability of commodities that are imported into Wales, what assessment have you made on the impact on public procurement?

Again, thank you for this question. There is a range of aspects to that question, which I'll try and cover briefly, but I'm obviously keen to have a further discussion with Members, if they are interested, on particular elements of it. So, we've done a lot of analysis across Welsh Government to understand what the impacts might be, both of sanctions, but also of the wider situation in respect of the crisis. So, we've looked at energy markets and overall inflation. The effects in Wales, in terms of our exposure to gas and oil from Russia, is less than elsewhere in Europe: under 5 per cent of our gas, for example, comes from Russia, with the rest coming from the North sea and Norway, as well as liquefied natural gas from countries such as Qatar and the US. But, of course, energy prices are set globally, so we will inevitably be feeling the impact of some of that, and we've done some additional work looking at what the impact would be on the economy if the price of a barrel of oil increased over $100. We've looked at various different scenarios, and what the impact might be, and what the choices then might be from the Bank of England in respect of interest rates and so on.

We've also looked at food in particular. The First Minister took some questions yesterday in respect of prices and what that will mean for the ability to maintain prices here in Wales. We are, I think, likely to see prices increase as a result of the situation. Fertiliser: again, the FM spoke to that yesterday. We've also done some research regarding metals and diamonds. There are some Wales-specific issues here, for example in the automotive industry. The Welsh Automotive Forum has spoken to members who supply components to Russian car manufacturing facilities, and so we're waiting to understand what the impacts might be there on sales and potentially further impacts beyond that. And obviously the aerospace industry—around half of the world's titanium for aerospace comes from Russia, and aerospace and the automotive industry are both really important industries for us here in Wales. So, we've done some analysis around that as well. So, we have these large potential impacts on the economy, but then also impacts on individual households. And I won't repeat the package of support that we've put in place, but Members will be familiar now with the package in respect of fuel prices and the £150 payment and so on. 

Plaid Cymru spokesperson, Llyr Gruffydd. 

Thank you very much, Llywydd. Minister, you will be aware that every 1 per cent of the value of public procurement that remains in Wales accounts for 2,000 new jobs, and that's why the Plaid Cymru manifesto wanted to see an increase, from the 52 per cent of value that stays in Wales at the moment to 75 per cent, so that that, in turn, creates 46,000 additional jobs in Wales.

Now, in the meantime, local authorities led by Plaid Cymru have been working to ensure that more of their funding remains within the local economy. Gwynedd Council, for example, has been trialling a 'keeping the benefit local' strategy, which considers the best way of using their funds locally, and over four years have increased local expenditure by the council from £56 million to £78 million, which is a very substantial increase of 39 per cent. And Carmarthenshire council, again led by Plaid Cymru, was the first local authority in Wales to put the COVID recovery plan in place, safeguarding 10,000 jobs and supporting far more microbusinesses that would otherwise have slipped through the net of Government support. And through the co-operation agreement between Plaid Cymru and the Welsh Government, I'm extremely pleased that this target of establishing a procurement target is now being looked at in earnest in order to secure the best benefits possible for the economy here in Wales.

Now, we need to ensure, of course, simultaneously, that any national targets or objectives are transferred to the local level. Can I ask, therefore, what the Welsh Government is doing to ensure that the good practice that we see in local authorities led by Plaid Cymru is emulated by other local authorities?

I would say that we have good practice right across Wales, to be fair to all local authorities run by a variety, of course, of different parties. We do see good practice taking place across Wales, and I am really pleased that part of our co-operation agreement is about increasing the amount of spend that is spent here in Wales and kept here in Wales in that kind of foundational economy approach that we're very keen to deliver on. We referred to 52 per cent—I had a meeting with your designated Member recently where we talked about some of the challenges of that figure in respect of it only accounting for where the invoice is sent, essentially, rather than really getting under where the spend is happening and particularly not getting under where the spend is happening in those supply chains. So, we've got a piece of work going on to try and further refine that figure to get a better understanding of it, and part of that work, then, is about looking at where these supply chain voids are. So, we procure things from outside of Wales—what are they and can we do them here and can we do them better and can we do them in a way that creates local jobs? So, that piece of work is an important one that I'm sure will take us towards our shared ambition to improve the amount of money that is retained here in Wales from the public sector.

And that prize of tens of thousands of additional jobs can happen without spending any additional funding, because it's funding that we're already spending on procurement, but it can be spent in a different way. So, I welcome the fact that this is being looked at properly.

But it's not only economic benefits that come in light of strengthening procurement policy; there are all sorts of other positives. We know that it could help to reduce carbon emissions. We only need to look at cutting food miles, for example, as one example. It can strengthen the circular economy, it can improve production standards, and in the food context that can lead to better outcomes in terms of public health too.

And the food sector and the agricultural sector specifically is one very important element of this work, because providing nutritious local food through schools, hospitals, care services and so on would not only create new domestic markets that would strengthen the sector economically, but it would also, of course, reduce imports. And in the international context that we heard of in previous questions, creating more food resilience and more food security should be a priority for us all.

Can I ask you, therefore, what discussions you as Minister responsible for procurement within Government have had with the Minister for rural affairs on the agriculture Bill, because it is crucial, of course, that the plans and objectives on procurement, which I'm sure we all share here, do tie in closely with that Bill, and that the Bill itself echoes and supports the efforts to create new local markets?

This is absolutely something that is part of the approach to the agriculture Bill, and it's one of the things that I know the Minister for rural affairs has also been discussing with Peter Fox in respect of his proposals for a Bill, which would seek to ensure that we procure more food locally. I think this is one area where we do have some good practice emerging in the work that's being led by Caerphilly. They're leading the procurement in terms of food to try and ensure that there is more opportunity for the public sector to procure together, to make those economies of scale work for them. We're also looking at what more we can do to start—. Actually, this is part of the supply chain void issue, but on a much smaller scale, but it is about looking at where we're procuring our food from. So, one of the weird things is, despite all the chicken farms popping up across Wales, we don't seem to be able to secure contracts for poultry from Welsh farmers, and that's because they prefer to sell to the supermarkets at this point. So, we're having some discussions as to how we can create a poultry line that would then use the markets into the public sector. So, we are actively working in this particular area, sometimes in a very detailed and focused kind of way.